C0. Introduction5 Medium-term 1 4 Fiscal year 2017 - 2020 Long-term 4 14 Fiscal year 2020 - 2030 C2.2 (C2.2) Select the option that best describes how your organization's processes

1

C0. Introduction

C0.1

(C0.1) Give a general description and introduction to your organization. Based on our basic philosophy that "Our company can not grow without the prosperity of the

Tohoku region", we have delivered electricity which is essential for a prosperous living to our

customers and have prospered with the region.

As the environment surrounding the energy business evolves quickly, as seen with the

progress of the electric power system reform, the Tohoku Electric Power Group has set the

"Tohoku Electric Power Group Medium-term Management Policy (FY 2017 - FY 2020)" as a

guide for sustainable growth with the region still in the midst of reconstruction.

In the future, based on this policy, we will respond to the expectations of our customers and

local communities by actively evaluating together the new business opportunities and

challenging further growth.

C0.2

(C0.2) State the start and end date of the year for which you are reporting data.

Start date End

date

Indicate if you are providing emissions data for past reporting

years

Row

1

April 1

2017

March

31

2018

No

C0.3

(C0.3) Select the countries/regions for which you will be supplying data. Japan

C0.4

(C0.4) Select the currency used for all financial information disclosed throughout your

response. JPY

C0.5

(C0.5) Select the option that describes the reporting boundary for which climate-

related impacts on your business are being reported. Note that this option should

align with your consolidation approach to your Scope 1 and Scope 2 greenhouse gas

inventory. Financial control

2

C-EU0.7

(C-EU0.7) Which part of the electric utilities value chain does your organization

operate in? Select all that apply.

Row 1

Electric utilities value chain Electricity generation

Transmission

Distribution

Other divisions

C1. Governance

C1.1

(C1.1) Is there board-level oversight of climate-related issues within your

organization? Yes

C1.1a

(C1.1a) Identify the position(s) of the individual(s) on the board with responsibility for

climate-related issues.

Position of

individual(s)

Please explain

Board Chair The Representative Director & Chairman of the Board and the Board of Directors,

determines important matters of business execution related to climate change,

receives regular reports on the status of business execution from Directors and

supervises the execution of duties by Directors.

C1.1b

(C1.1b) Provide further details on the board’s oversight of climate-related issues.

Frequency with

which climate-

related issues are

a scheduled

agenda item

Governance

mechanisms into

which climate-

related issues are

integrated

Please explain

Sporadic - as

important matters

arise

Reviewing and

guiding business

plans

At the Board of Directors, important matters of business

execution related to climate change are determined, and

reports on the status of business execution from

3

Directors and execution of duties by Directors are

supervised. Regarding climate change issues, the

Board determines important matters of business

execution, receives regular reports on the status of

business execution from Directors and supervises the

execution of duties by Directors. For example, in the

“Tohoku Electric Power Group Medium-Term

Management Policy”, the Company has set one of the

company’s strength as “Strength 2: Pursue New

Business Opportunities for Growth” where one of the

measures is “Promotion of the Renewable Energy

Business”. The “Tohoku Electric Power Group Medium-

Term Management Policy” is approved by the Board of

Directors, and the progress of measures including

“Promotion of the Renewable Energy Business” is

regularly reported to the Board of Directors, and

supervision including review and guidance is conducted

as necessary.

C1.2

(C1.2) Below board-level, provide the highest-level management position(s) or

committee(s) with responsibility for climate-related issues.

Name of the position(s)

and/or committee(s)

Responsibility Frequency of reporting to the

board on climate-related

issues

President Both assessing and managing

climate-related risks and

opportunities

Once a year

C1.2a

(C1.2a) Describe where in the organizational structure this/these position(s) and/or

committees lie, what their associated responsibilities are, and how climate-related

issues are monitored. The President is the chair of the Global Environment Issue Countermeasure Council, where we

deliberate on companywide environmental management, including climate change issues, from

a comprehensive perspective and promote environmental management which aims for

sustainable development with the local community.

In addition, the President has established, under the Global Environment Issue

Countermeasure Council, the Environmental Management Committee which is chaired by the

Managing Executive Officer and deliberates on company-wide environmental management

policies and plans, individual measures, performance evaluation across the divisions, and

provides proposals and reports to the Global Environment Issue Countermeasure Council. A

PDCA cycle is implemented to evaluate the company-wide environmental management policies

4

and plans, individual measures, and performance evaluations to reduce greenhouse gases to

realize a low-carbon society (replacement and capacity increase of the Shin-Sendai Thermal

Power Station that achieved the world's highest thermal efficiency) and actively use renewable

energy by making use of the abundant nature of Tohoku and Niigata (including the construction

of Tsugaru Power Station and the Dai-ni Yabukami Power Station as well as large-scale

renovation work for hydroelectric power stations such as the Kanose Power Station), both of

which are measures for the Mid-term Environmental Action Plan that sets "promotion of

multifaceted global warming countermeasures based on S+3E (Safety, Energy Security,

Economy and Environmental Conservation)" as one of the important issues.

C1.3

(C1.3) Do you provide incentives for the management of climate-related issues,

including the attainment of targets? Yes

C1.3a

(C1.3a) Provide further details on the incentives provided for the management of

climate-related issues.

Who is entitled to benefit from these incentives? All employees

Types of incentives Monetary reward

Activity incentivized Other, please specify (Environmental activities, emissions reduction, energy reduction

and technological development for efficiency improvement)

Comment We have a monetary reward system to honour those who have contributed significantly

to initiatives such as emissions reduction, energy reduction and efficiency improvement.

C2. Risks and opportunities

C2.1

(C2.1) Describe what your organization considers to be short-, medium- and long-term

horizons.

From (years) To (years) Comment

Short-term 0 1 Fiscal year 2017 - 2018

5

Medium-term 1 4 Fiscal year 2017 - 2020

Long-term 4 14 Fiscal year 2020 - 2030

C2.2

(C2.2) Select the option that best describes how your organization's processes for

identifying, assessing, and managing climate-related issues are integrated into your

overall risk management. Integrated into multi-disciplinary company-wide risk identification, assessment, and management

processes

C2.2a

(C2.2a) Select the options that best describe your organization's frequency and time

horizon for identifying and assessing climate-related risks.

Frequency of monitoring How far into the future are risks considered? Comment

Row 1 Annually More than six years

C2.2b

(C2.2b) Provide further details on your organization’s process(es) for identifying and

assessing climate-related risks. [How are climate-related risks identified and assessed at a company level?]

Every year, each division regularly conducts a business and financial risk analysis, which

includes the long-term risks of climate change as determined by the Company. Among the

business risks for the Company, for example, are the transition risk to performance and

financial conditions as a result of a rise in fuel prices and transportation costs due to a

significant increase in taxes for global warming countermeasures, and the particularly large

physical risk to our 209 hydropower stations (the most ownership in the country) due to

abnormal changes in precipitation. Regarding these important risks, we regularly identify and

evaluate risks according to their contents, and for risks that may have a serious effect on our

management, each division formulates actions such as countermeasures for each fiscal year,

which are incorporated into the management plan and managed as risks in the management

cycle. The status of risk management is regularly reported, including to the Board of Directors.

[How are climate-related risks identified and assessed at an asset level?]

Every year, when conducting the periodic business and financial risks analysis for each

division, which includes climate change risks, we also identify, analyze and evaluate risks for

each business establishment including plants. Regarding countermeasures of important risks

including physical factors such as natural disasters, in addition to establishing in-house

regulations, we prepare for emergency risks through trainings for typhoons and floods and

other disasters, as well as set up an internal committee to improve the safety of the nuclear

power stations by regularly evaluating and analyzing safeness, considering countermeasures to

reduce risks and respond in an appropriate manner.

6

[How does your organization define substantive financial or strategic impact on your business?]

Regarding the risks periodically reported from each business establishment, the risks are

managed by classifying them according to their respective categories, occurrence frequency

and assumed damages. For climate change risks which have financial impact above a certain

level, internal committees will consider countermeasures and regularly report to the Board of

Directors.

C2.2c

(C2.2c) Which of the following risk types are considered in your organization's

climate-related risk assessments?

Relevance

& inclusion

Please explain

Current

regulation

Relevant,

always

included

In the event that the suspension of nuclear power stations will be

prolonged and impact stable operation due to changes in policy and

regulations, the business performance and financial condition may be

affected. We regularly conduct business and financial risk analysis,

including current regulatory risks, to identify, analyze and evaluate the

risks. Important risks are taken into consideration at internal

committees according to their content and incorporated into the PDCA

cycle appropriately at the company level, including incorporating it into

the annual Mid-term Plan and Business Implementation Plan of each

division.

Emerging

regulation

Relevant,

always

included

Business performance and financial condition may be affected by

policy changes based on the Electricity System Reform or the Strategic

Energy Plan, including the establishment of the Organization for Cross-

regional Coordination of Transmission Operators, electric power

system reform consisting of full deregulation in the retail field and legal

unbundling of the transmission/distribution sectors. The Company

periodically conducts business and financial risk analysis including

emerging regulatory risks, and identifies, analyzes and evaluates the

risks. Important risks are taken into consideration at internal

committees according to their content and incorporated into the PDCA

cycle appropriately at the company level, including incorporating it into

the annual Mid-term Plan and Business Implementation Plan of each

division.

Technology Relevant,

always

included

Nuclear power back-end projects are ultra-long-term projects and imply

future uncertainty, but the risks of operators are mitigated by factors

such as institutional measures by the government.

However, the business performance and financial condition may be

affected due to changes in government policies and reviews of related

institutional measures, changes in the estimate of future expenses,

and cost burden increases due to changes in the operating situation of

the reprocessing facility. The Company periodically conducts business

and financial risk analysis including technology risks, and identifies,

7

analyzes and evaluates the risks. Important risks are taken into

consideration at internal committees according to their content and

incorporated into the PDCA cycle appropriately at the company level,

including incorporating it into the annual Mid-term Plan and Business

Implementation Plan of each division.

Legal Relevant,

always

included

The business performance and financial condition may be affected by

increased competition with electric utilities and other energy

companies due to the Electricity System Reform which includes a full

deregulation in the retail field. The Company periodically conducts

business and financial risk analysis including legal risks, and identifies,






Market Relevant,

always

included

Fluctuation of fossil fuel prices due to physical and transitional risks of

climate change, may affect the results of business performance and

financial condition. The Company periodically conducts business and

financial risk analysis including market risks, and identifies, analyzes

and evaluates the risks. Important risks are taken into consideration at

internal committees according to their content and incorporated into

the PDCA cycle appropriately at the company level, including

incorporating it into the annual Mid-term Plan and Business

Implementation Plan of each division. We have a track record of

introducing climate change derivatives that mitigate the risk of financial

fluctuations caused by temperature fluctuations.

Reputation Relevant,

always

included

If an act contrary to corporate ethics such as a violation of laws or

regulations happens, social credibility will decline, and the business

performance and financial condition may be affected. The Company

periodically conducts business and financial risk analysis including

reputational risks, and identifies, analyzes and evaluates the risks.

Important risks are taken into consideration at internal committees

according to their content and incorporated into the PDCA cycle

appropriately at the company level, including incorporating it into the

annual Mid-term Plan and Business Implementation Plan of each

division.

Acute

physical

Relevant,

always

included

A major power outage due to a natural disaster such as a typhoon,

resulting in damages to the facilities or a long-term suspension of the

power supply, may result in an adverse effect on business

performance and financial condition. The Company periodically

conducts business and financial risk analysis including acute physical

risks, and identifies, analyzes and evaluates the risks. Important risks

are taken into consideration at internal committees according to their

content and incorporated into the PDCA cycle appropriately at the

8

company level, including incorporating it into the annual Mid-term Plan

and Business Implementation Plan of each division.

Chronic

physical

Relevant,

always

included

As our company has 209 hydroelectric power stations in Tohoku and

Niigata prefectures, the largest ownership in the country, there is a

possibility that depending on the amount of rainfall and snowfall during

the year, there may be a decrease in fuel costs in the case of abundant

water, and an increase in fuel costs in the case of drought. As the

amount of electricity sold in the electricity business fluctuates due to

changes in factors such as the temperature, the business performance

and financial condition may be affected. The Company periodically

conducts business and financial risk analysis including chronic physical

risks, and identifies, analyzes and evaluates the risks. Important risks

are taken into consideration at internal committees according to their




Upstream Relevant,

always

included

If the CIF costs and exchange rates of materials such as coal, LNG

and heavy crude oil fluctuate significantly, the business performance

and financial condition may be affected. The Company periodically

conducts business and financial risk analysis including upstream risks,

and identifies, analyzes and evaluates the risks. Important risks are

taken into consideration at internal committees according to their




Downstream Relevant,

always

included

As electricity sales in the electricity business fluctuate due to changes

such as in temperature, this may affect the business performance and

financial condition. The Company periodically conducts business and

financial risk analysis including downstream risks, and identifies,






C2.2d

(C2.2d) Describe your process(es) for managing climate-related risks and

opportunities. [Risk]

Transition risks include in particular the financial impact due to the expansion of introduction of

global warming prevention taxes on fossil fuels and physical risks due to the rapid change in

precipitation and its impact on our 209 hydropower stations (the most ownership in Japan). For

the medium- to long-term risks including our climate change risks, which may have a serious

impact on our business, we incorporate measures into the annual Business Plan formulated by

9

each division and manage the risks within the management cycle.

In addition to preventing unforeseen circumstances, including long-term power outages,

equipment damages and large-scale power outages due to natural disasters such as typhoons,

in advance, we have established the Committee of Crisis Management aimed at minimizing the

damage in the event of occurrence. Also, the Large-scale Disasters Countermeasure Meeting

aims to prepare for large scale supply interruption accidents and severe accidents at nuclear

power stations. The Committee of Market Risk Management manages market risks caused by

factors such as wholesale electricity. Each committee regularly reports on the status of risk

management, including to the Board of Directors.

[Opportunity]

As regulations are tightened to reduce emissions, the importance and competitiveness of our

209 hydropower plants in Japan are expected to increase. Utilization of new technologies such

as construction and replacement of high-efficiency combined cycle power generation facilities,

efforts to expand the introduction of renewable energy through research and development such

as hydrogen production technologies, and VPP (virtual power plant) demonstration projects are

being promoted. VPP refers to the use of new information technology such as IoT for remote

energy resources such as power generation facilities, storage batteries, and electric vehicles

owned by local governments, companies, and household customers. By controlling and

consolidating it, it functions as if it were a single power plant. Utilization of VPP contributes to

strengthening regional disaster prevention capabilities and reducing environmental impacts, so

in the event of a natural disaster, it has the potential to gain customer support as a new

technology that minimizes damage and contributes to the reconstruction and development of

the region. For the medium- and long-term opportunities for the Company regarding climate

change, we will incorporate measures into the Mid-term Environmental Action Plan formulated

every year and implement action policies through the PDCA cycle. We have established the

Environmental Management Committee to formulate policies and plans related to the Mid-term

Environmental Action Plan, and deliberate individual measures and performance evaluations

across departments, which will be proposed and reported to the Global Environment Issue

Countermeasure Council.

C2.3

(C2.3) Have you identified any inherent climate-related risks with the potential to have

a substantive financial or strategic impact on your business? Yes

10

C2.3a

(C2.3a) Provide details of risks identified with the potential to have a substantive

financial or strategic impact on your business.

Identifier Risk 1

Where in the value chain does the risk driver occur? Direct operations

Risk type Physical risk

Primary climate-related risk driver Chronic: Changes in precipitation patterns and extreme variability in weather patterns

Type of financial impact driver Increased operating costs (e.g., inadequate water supply for hydroelectric plants or to

cool nuclear and fossil fuel plants)

Company- specific description The company owns the largest number of hydropower stations in the Tohoku region and

Niigata prefecture in Japan. Sudden changes in annual rainfall/snowfall have a major

impact on hydroelectric power generation. In the case of abundant water, fuel costs will

decline due to a decrease in the operation of thermal power generation and in the case

of drought, fuel costs will increase.

Time horizon Short-term

Likelihood About as likely as not

Magnitude of impact High

Are you able to provide a potential financial impact figure? Yes, a single figure estimate

Potential financial impact 5,810,000,000

Potential financial impact figure – minimum (currency)

Potential financial impact figure – maximum (currency)

11

Explanation of financial impact Amount of impact in FY2017. Calculations were made by multiplying 700 million yen

(the impact of revenue and expenditure per 1% water intake rate in FY2017) by 8.3 (the

water output rate in FY2017 was 108.3% (+ 8.3% compared to the average year)).

Management method Risks are mitigated as much as possible concerning the increase in fuel costs

associated with increased thermal power generation operation during drought by

improving power generation efficiency without changing the amount of water used

through the effective use of water resources through the establishment and renovation

of hydropower plants managed. For example, as the Kanose Power Plant has

deteriorated over time, large-scale renovation work has been carried out on the power

plant, the number of turbine generators has been revised from six to two, and highly

efficient vertical valve turbines have been adopted. As a result, the maximum output

increased by about 10% (49,500 → 54,200kW) without changing the amount of water

used, and commercial operation resumed in September 2017.

Abundant water lowers fuel costs, while droughts increase fuel costs. However certain

adjustments are made based on the provision of reserve for fluctuation in water level.

The risk management cost of 1.1 billion yen is the reserve for droughts for FY2017.

Cost of management 1,100,000,000

Comment

Identifier Risk2

Where in the value chain does the risk driver occur? Direct operations

Risk type Physical risk

Primary climate-related risk driver Acute: Increased severity of extreme weather events such as cyclones and floods

Type of financial impact driver Increased capital costs (e.g., damage to facilities)

Company- specific description Business performance and financial conditions may be affected by increase in

equipment repair costs and alternative fuel costs due to natural disasters such as

typhoons causing suspension of power supply or large-scale blackout and damaging

hydropower stations at sites such as the Tsugaru Power Station, the Dai-ni Yabukami

Power Station and the Kanose Power Station, steam power generation facilities at sites

12

such as the Shin-Sendai Thermal Power Station, and power transmission facilities and

substation equipment.








Explanation of financial impact The financial impact describes the amount recorded as an extraordinary loss during the

Niigata - Fukushima heavy rainfall in FY 2011. In the event of damage to facilities or

long-term suspension of power supply, the business performance and financial condition

may be affected.

Management method Regarding risks related to natural disasters, we have established internal regulations

and prepare for emergency risks through actions such as training for disasters and

effective use of damage insurance. The risk management expense of 841 million yen is

the damage insurance cost for FY2017.

Cost of management 841,000,000

Comment

Identifier Risk3

Where in the value chain does the risk driver occur? Supply chain

Risk type

13

Transition risk

Primary climate-related risk driver Market: Increased cost of raw materials

Type of financial impact driver Market: Abrupt and unexpected shifts in energy costs

Company- specific description Thermal power plants that rely on fossil fuels such as coal, heavy and crude oil account

for 86% of electricity generated. However, business performance and financial condition

may be affected by thermal power generation fuel costs at sites such as Haramachi

Thermal Power Station (coal) and Shin-Sendai Thermal Power Station (LNG) due to

fluctuations of CIF costs for coal, LNG, heavy and crude oils and exchange rates as well

as soaring fuel costs and transportation costs in the event that tax for global warming

countermeasures against fossil fuels rises above expectations.








Explanation of financial impact The effect of the time lag of fuel cost adjustment system for FY 2016 is as follows: The

fuel cost adjustment system calculates the fuel cost adjustment unit price two months

later, based on the 3-month average fuel price and reflects it to the monthly electricity

charge. Due to fluctuations in fuel prices, there is a time lag in the reflection of fuel costs

(expenses) and fuel cost adjustment (electricity charge income), which causes a

temporary profit increase / decrease.

Management method With regard to fluctuations in thermal power generation fuel costs in sites such as

Haramachi Thermal Power Station (coal) and Shin-Sendai Thermal Power Station

(LNG), we strive to diversify the risk of fuel price fluctuations by aiming for a balanced

14

power structure. The CIF price of fuels such as coal, LNG, and heavy crude oil and

exchange rate are reflected to the electricity charge. We are also working to reduce

negative financial impact risk by effectively utilizing financial transactions such as fuel

price swaps to reduce the risk of fuel price fluctuations. The risk management cost of

1.763 billion yen is the net receivables and liabilities arising from derivative transactions

in net value.

Cost of management 1,763,000,000

Comment

C2.4

(C2.4) Have you identified any climate-related opportunities with the potential to have

a substantive financial or strategic impact on your business? Yes

C2.4a

(C2.4a) Provide details of opportunities identified with the potential to have a

substantive financial or strategic impact on your business.

Identifier Opp1

Where in the value chain does the opportunity occur? Direct operations

Opportunity type Product/Service

Primary climate-related opportunity driver Development and expansion of low emission products / services

Type of financial impact driver Increase sales through demand for low-emission products and services

Company- specific description The Company owns 209 hydropower stations (the largest ownership in Japan) , and the

company group as a whole has five locations with six facilities in the Tohoku region at

the end of 2017, with a total output of 212,300 kW, the largest geothermal power

generation facilities in Japan (electric power generated in fiscal 2017 was approximately

98.6 million kWh, equivalent to the amount of electricity used by about 290,000

households per year). In addition, with the permission of the Ministry of the

Environment, we are also making efforts to utilize geothermal energy in parks which

could not be used in the past, using the “diagonal digging” method from outside the

15

national and quasi-national parks. In the future, we will work on new developments and

business participation, utilizing the know-how cultivated by our company and our

corporate group, with regard to all renewable energy such as solar power, hydropower,

geothermal, and biomass, we aim to develop 2 million kW mainly in the Niigata area.

Our corporate reputation may improve due to the growing demand for low carbon

energy.

Time horizon Current







Explanation of financial impact Our corporate reputation may improve and our operating revenues may increase due to

the growing demand for low carbon energy. The amount of 14.262 billion JPY is the

estimated value (on the basis of FY 2017) when the operating revenue (lighting

(residential) charge and power charge) increases by 1%.

Strategy to realize opportunity The Company owns 209 hydropower stations (the largest ownership in Japan) and the

entire group owns geothermal power generation facilities which account for about half of

Japan's geothermal power output. In the Tohoku Electric Power Group Medium-Term

Management Policy (FY 2017- FY 2020), we indicate that we “promote the development

of hydropower, geothermal power and wind power generation together with the group

companies to further promote the spread of renewable energy in the well-suited lands of

the Tohoku region” and implement a PDCA cycle to incorporate the Mid-term Plan and

Business Implementation Plan of each division. In addition, concerning our efforts

overseas, we have equity stake in the Rantau Dedap Geothermal Power Station Project

by the Republic of Indonesia since March 2018 which is the first of the kind. We are

taking advantage of the knowledge and experience of geothermal power generation

technology which has been cultivated in Japan. We believe that we can actively

contribute to the stable operation of the power station. The cost of realizing the

opportunity of 21.168 billion JPY describes the increase in the recorded cost of

hydroelectric power generation facilities and new energy power generation facilities in

16

FY2017.

Cost to realize opportunity 21,168,000,000

Comment

Identifier Opp2


Opportunity type Energy source

Primary climate-related opportunity driver Use of new technologies

Type of financial impact driver Reduced operational costs (e.g., through use of lowest cost abatement)

Company- specific description Concerning the Shin-Sendai Thermal Power Station No 3 series, the existing Shin-

Sendai Thermal Power Station Units 1 and 2 were terminated and replaced with existing

high-efficiency combined cycle power generation facilities. Commercial operation

commenced at half of capacity in December 2015, and at full output in July 2016,

achieving the world's highest thermal efficiency of 60% or more. Compared to

conventional gas-fired thermal power, fuel consumption and CO2 emissions can be

reduced by about 30% each. Introduction of high-efficiency thermal power may

contribute to reducing CO2 emissions and power generation costs.

Time horizon Current






17


Explanation of financial impact The financial impact describes the increase factor in FY 2016 due to the operation of the

Shin-Sendai Thermal Power Station No. 3 series which can reduce fuel consumption by

about 30% compared to conventional gas fired power stations.

Strategy to realize opportunity In the "Tohoku Electric Power Group Medium-Term Management Policy” (FY 2017 - FY

2020) we indicate that "with regard to thermal power generation, we strive to strengthen

our cost-competitive power from optimal power supply configuration, by developing

economically superior coal fired power stations and high efficiency gas thermal power

stations." We are implementing a PDCA cycle to incorporate the mid-term plan and

business implementation plan of each division. In order to realize a reduction of CO2

emission and power generation cost, the existing Shin-Sendai Power Station Units 1

and 2 were terminated and replaced with existing high-efficiency combined cycle power

generation facilities. Commercial operation commenced at half of capacity in December

2015, and at full output in July 2016, achieving the world's highest thermal efficiency of

60% or more.

In July 2017, we increased the rated output (980,000kW → 1046,000kW: an increase of

66,000kW) and started operation. In addition, the Sendai Thermal Power Station Unit

No. 4, which is also a high-efficiency combined cycle power generation facility (LNG),

increased its rated output in April 2017 (446,000 kW → 468,000 kW: an increase of

22,000 kW) and also started operation. In order to further improve thermal efficiency,

Joetsu No. 1 which will be developed in the future will strive to achieve a thermal

efficiency of about 63%.

26.195 billion JPY describes the increase in the recorded cost of steam power

generation facilities in FY 2017 which includes the increase in recorded cost of high-

efficiency thermal power stations.


Comment

Identifier Opp3


Opportunity type Products and services

18

Primary climate-related opportunity driver Development of new products or services through R&D and technological innovation

Type of financial impact driver Increase sales through new solutions for adaptation needs (e.g. insurance risk transfer

products and services)

Company- specific description Our aim to be selected by customers and grow with the region while contributing to

regional reconstruction and development through stable supply of electric power is

outlined in our policies such as the Tohoku Electric Power Group Medium-Term

Management Policy (FY 2017- FY 2020). Based on such policies we conduct research

and development on high priority areas to contribute to system stabilization related to

large-scale renewable energy linkage, as well as advanced technologies such as

hydrogen production / utilization technology for renewable energy and “Virtual Power

Plant (VPP) Testing Project to strengthen competitiveness. The promotion of the spread

of renewable energy may lead to the expansion of our business.

Time horizon Long-term







Explanation of financial impact Increasing demand for low-carbon energy may improve our reputation and lead to

expansion of our business opportunities, including an increase in operating revenue.

The amount of 14.262 billion JPY describes the estimated value (on the basis of FY

2017) when the operating revenue (lighting charge and power charge) increases by 1%.

Strategy to realize opportunity Our aim to be selected by customers and grow with the region while contributing to

regional reconstruction and development through stable supply of electric power is

outlined in our policies such as the Tohoku Electric Power Group Medium-Term

Management Policy (FY 2017- FY 2020). Based on such policies, we have been

19

implementing the Virtual Power Plant (VPP) Demonstration Project for three years from

FY2018 as an initiative which utilizes new information technologies such as IoT and AI.

VPP refers to the use of new information technology such as IoT for remote energy

resources such as power generation facilities, storage batteries, and electric vehicles

owned by local governments, companies, and general household customers. By

controlling and consolidating it, it functions as if it were a single power plant. In this

project, we will collect distributed power sources such as renewable energy including

solar power as a VPP energy resource and verify it for use as a supply-demand balance

adjustment function. In addition, we will work on the verification of technology (V2G:

Vehicle to Grid) for charging and discharging electric vehicle storage batteries by

connecting them to the power system by making effective use of solar power generation

facilities and storage batteries installed in public facilities. In addition, we will work on the

development of services that lead to energy and cost savings by making effective use of

customer facilities and equipment. In this project, in cooperation with Sendai City, after

signing the “Basic Agreement on the Construction of Disaster Management

Environment-Conscious Energy Management Utilizing VPP Technology”, the

photovoltaic power generation facilities and storage batteries of 25 designated

evacuation centers will be consolidated as VPP energy resources, to enable the facility's

operational status to be remotely monitored and optimally controlled, as well as to verify

whether it can be used as a power supply / demand balance adjustment function.

6.338 billion JPY describes the research expenses for FY 2017, including research

expenses related to VPP.


Comment

C2.5

(C2.5) Describe where and how the identified risks and opportunities have impacted

your business.

Impact Description

Products and

services

Impacted In the Tohoku Electric Power Group Medium-Term Management

Policy (FY 2017- FY 2020), we indicate that we “promote the

development of hydropower, geothermal power and wind power

generation together with the group companies to further promote

the spread of renewable energy in the well-suited lands of the

Tohoku region”. We commenced commercial operation of the

Tsugaru Power Station in May 2016 and the Dai-ni Yabukami

Power Station in June 2016, as well as resumed commercial

operation of the Kanose Power Station in September 2017. The

Kanose Power Station had been aging and had about 80 years

since its start of operation. By adopting a valve turbine, the

maximum output was increased by about 10% (49,500kW →

54,200kW) without changing the amount of water used. We

20

actively utilize renewable energy by taking advantage of the

abundant nature of the Tohoku and Niigata region. By starting

operations at the Tsugaru Power Station and Dai-ni Yabukami

Power Station and resuming operations at the Kanose Power

Station, an annual CO2 reduction equivalent to 121,292 t-CO2 was

obtained in FY2017. In the future, we will work on new

developments and business participation, utilizing the expertise

cultivated by our company and our corporate group for renewable

energy in general such as solar power, hydropower, geothermal,

and biomass with an emphasis on wind power generation. We aim

to develop 2 million kW mainly in the Tohoku/Niigata region.

Supply chain

and/or value

chain

Impacted for

some suppliers,

facilities, or

product lines

In order to reduce the environmental burden such as reduction of

CO2 emissions, we developed with our transformer supplier,

Kitashiba Electric Co., Ltd., an environmentally friendly

transformers that use rapeseed oil instead of the conventional

mineral oil for insulating which is the first ever in Japan. Both

companies cooperated in order to solve problems such as cost

reduction, measures against aging years and environmental load

reduction to newly develop a practically usable environmentally

friendly transformer. This transformer has an extended life

expectancy of 60 years, twice as long as the conventional product,

and has reduced power loss by about 15%. Also, when discarding

the transformer, the insulating oil is extracted and incinerated, but

as rapeseed oil absorbs CO2 during growth the CO2 emitted during

incineration is offset to become carbon neutral. As of the end of FY

2017 we introduced 64 units, and we anticipate an annual

reduction of 1,167 tons of CO2 emissions.

Adaptation

and mitigation

activities

Impacted

At the Shin-Sendai Thermal Power Station No 3 series, in order to

control CO2 emission and to reduce generation cost, the existing

Shin-Sendai Power Station Units 1 and 2 were terminated and

replaced with existing high-efficiency combined cycle power

generation facilities. Commercial operation commenced at half of

capacity in December 2015, and at full output in July 2016,

achieving the world's highest thermal efficiency of 60% or more. In

July 2017, we increased the rated output (980,000kW →

1046,000kW: an increase of 66,000kW) and started operation. In

addition, the Sendai Thermal Power Station Unit No. 4, which is

also a high-efficiency combined cycle power generation facility

(LNG), increased its rated output in April 2017 (446,000 kW →

468,000 kW: an increase of 22,000 kW). have started. In order to

further improve thermal efficiency, Joetsu No. 1, which will be

developed in the future, will strive to achieve a thermal efficiency of

about 63%.

Investment in

R&D

Impacted

Our Research & Development Center started operation of the

"hydrogen production system" to conduct research on hydrogen

21

production in March 2017 and carried out research using this

system until March 2019. In order to expand the introduction of

renewable energy, adjustment of output fluctuation due to weather

conditions is an issue. In the research, we investigate the

possibility that electricity with large output fluctuation can be used

and absorbed for hydrogen production, and the possibility that

hydrogen production technology, similar to storage battery, can be

applied as countermeasure for the expanding introduction of

renewable energy. We installed new equipment such as solar

power generation equipment and hydrogen production equipment

in the building of the Research & Development Center where we

manufactured and stored hydrogen using electricity generated by

photovoltaic power generation. Electricity for the center was

generated from the hydrogen developed in this research. In

addition, as an effort to utilize new information technologies such

as IoT and AI, we have been implementing a “Virtual Power Plant

(VPP) Demonstration Project” for three years from FY2018. In this

project, in cooperation with Sendai City, we signed the “Basic

Agreement on the Construction of Disaster and Environment-

Conscious Energy Management Utilizing VPP Technology”. In

order to strengthen regional disaster prevention capabilities and

reduce environmental impact, the photovoltaic power generation

facilities and storage batteries at 25 designated evacuation centers

in the city will be consolidated as VPP energy resources. The

operational status of facilities will be remotely monitored and

optimally controlled to verify VPP utilization as an adjustment

function of the power supply-demand balance. Research expenses

in FY 2017 were ¥ 6,338 billion. This includes research costs

related to hydrogen production and VPP.

Operations

Impacted

Shin-Sendai Thermal Power Station No 3 series (LNG / output

980,000kW) which achieved the world's highest thermal efficiency

of 60% or more (lower heating value standard) commenced full

operations from July 2016. We strove for awareness of plant

performance management through visualization of thermal

efficiency of each thermal power stations and to maintain and

improve thermal efficiency by daily management and performance

tests after periodic inspection to improve thermal efficiency. This

resulted in a continuous improvement of 46.2% in thermal

efficiency at the power generation end for all thermal power

stations in FY 2017, compared to 45.6% in FY2015 and 46.3% in

FY2016.

Other, please

specify

22

C2.6

(C2.6) Describe where and how the identified risks and opportunities have factored

into your financial planning process.

Relevance Description

Revenues

Not yet

impacted

The Company owns 209 hydroelectric power stations (the largest

ownership in Japan) and owns geothermal power generation facilities

that accounts for about 40% of those in Japan. In the future, we will

work on new developments and business participation, utilizing the

know-how cultivated by our company and our corporate group for

renewable energy in general such as solar power, hydropower,

geothermal, and biomass mainly on wind power generation. We aim to

develop 2 million kW mainly in the Niigata area. In addition, we are

working on the development of services with low emissions through R

& D and innovation related to advanced technologies such as

hydrogen production and utilization technology using renewable

energy and VPP. With regard to VPP, we plan to provide three years

from FY2018 to 2020 as the verification period and will gradually start

providing specific services based on the results obtained through the

verification.

Based on the Paris Agreement, as Japan's response to achieve

emission reduction targets in FY 2030 progresses, the demand for

low-carbon energy will grow and may increase our business

opportunities and improve reputation as well as increase revenue.

Operating

costs

Impacted

In preparation for natural disasters such as typhoons, in a planned

manner we have included inspection and repair of hydroelectric power

generation facilities including the Tsugaru Power Station, the Dai-ni

Yabukami Power Station and the Kanose Power Station, steam power

generation facilities such as the Shin-Sendai Thermal Power Station,

and facilities for power transmission and at substations in the financial

plan for improving the reliability of the facilities. Repair expenses for

FY 2017 were 189.57 billion JPY.

Capital

expenditures

/ capital

allocation

Impacted

In July 2015, we merged Tosei Kougyo Co., Inc., which is responsible

for hydropower projects, Tohoku Hydropower & Geothermal Energy

Co, Inc., which is responsible for hydroelectric power generation and

geothermal power generation, TOHOKU NATURAL ENERGY

DEVELOPMENT Co., Ltd., which is responsible for wind power

projects, and Tohoku Solar Power Company, Ltd., which is

responsible solar power projects. We established the Tohoku

Sustainable & Renewable Energy Co., Inc. as the core renewable

energy power generation company within the group and have a 100%

stake in Tohoku Sustainable & Renewable Energy Co., Inc. with a

capital stock of 5.27 billion JPY. In June 2017, Tohoku Electric Power

Energy Trading Co., Ltd. was established to control fluctuations in fuel

costs through the use of fuel futures. The company's capital was 495

23

million yen and capital reserves were 495 million yen with 100%

investment.

Acquisitions

and

divestments

Impacted

In March 2017, in order to further strengthen our total energy solution

service, the Company announced that it will acquire all shares

(investment ratio 86.1% → 100%) of TOHOKU ENERGY SERVICE

Co., Ltd. ("Tohoku ESCO"), a group company of the Company.

(Making the Company a wholly owned subsidiary on April 3, 2017.)

Tohoku ESCO is mainly engaged in solution services such as

corporate customers' energy conservation consulting and installation /

operation of energy facilities. So far, we have been working towards

improving energy usage efficiency based on customers' energy usage

situation to provide one-stop proposals for operation improvement and

equipment introduction, as well as design, procurement and operation

of air conditioning and electricity reception / transformation equipment.

Meanwhile, in order to respond to customers' energy needs for

reduction of energy costs and environmental awareness, to realize

further energy and cost savings, we have developed an energy

management system (EMS) "EXEMS" which utilizes IoT and AI.

By making this wholly owned subsidiary, we will strengthen the total

energy solution that combines energy provided by our company

(electricity and gas) with services such as EMS and facility

consignment services by Tohoku ESCO, so that we can make more

prompt and accurate proposals for various forms of energy usage by

customers.

Access to

capital

Not

impacted

We are procuring capital from the perspective of overall optimization

while promoting efforts to realize the Action Plan for the Electricity

Business for Achieving a Low-Carbon Society, which aims for the

electric power business as a whole in FY 2030 to reduce CO2

emissions intensity to 0.37 kg-CO2/kWh, although we do not procure

capital for the purpose of dealing with specific risks and opportunities

and have no plans at the moment.

Assets

Impacted

The fixed assets used in the electric power business are all in one

asset group because all assets from power generation to sales are

united to generate cash flow. It will affect the operation of fixed assets

such as power generation facilities, based on the outlook for power

demand based on stricter regulations on fossil fuel power generation

facilities and responses to climate change measures.

The Shin-Sendai Thermal Power Station No. 3 series, which is part of

mitigation activities through high efficiency, terminated the existing

Shin-Sendai Power Station Units 1 and 2 and replaced them with

existing high-efficiency combined cycle power generation facilities.

Commercial operation commenced at half of capacity in December

2015, and at full output in July 2016, achieving the world's highest

thermal efficiency of 60% or more.

24

In July 2017, we increased the rated output (980,000kW →

1046,000kW: an increase of 66,000kW) and started operation. In

addition, the Sendai Thermal Power Station Unit No. 4, which is also a

high-efficiency combined cycle power generation facility (LNG),

increased its rated output in April 2017 (446,000 kW → 468,000 kW:

an increase of 22,000 kW) and started operation.

Liabilities

Impacted

In FY 2017, we issued corporate bonds of 130 billion JPY which

includes corporate bond with the objective of allocating investments to

facility funds for activities such as responding to natural disasters

(physical risks) and reducing CO2 emissions (transition risks).

Other

C3. Business Strategy

C3.1

(C3.1) Are climate-related issues integrated into your business strategy? Yes

C3.1a

(C3.1a) Does your organization use climate-related scenario analysis to inform your

business strategy? No, but we anticipate doing so in the next two years.

C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-

FB3.1b/C-MM3.1b/C-OG3.1b/C-PF3.1b/C-ST3.1b/C-

TO3.1b/C-TS3.1b

(C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-FB3.1b/C-MM3.1b/C-OG3.1b/C-

PF3.1b/C-ST3.1b/C-TO3.1b/C-TS3.1b) Indicate whether your organization has

developed a low-carbon transition plan to support the long-term business strategy. Yes

C3.1c

(C3.1c) Explain how climate-related issues are integrated into your business

objectives and strategy. [A company-specific explanation of how business objectives and strategy have been influenced

by climate-related issues]

25

Based on the adoption of the Paris Agreement at COP 21, the Global Warming

Countermeasure Plan adopted by the Japanese government will reduce greenhouse gas

emissions by 26% by 2030 and by 80% by 2050, compared with 2013 levels.

Based on this, the Electricity Business Council for a Low-Carbon Society, which was

established as an initiative of the utilities' voluntary global warming countermeasures, aims to

promote initiatives aimed at realizing the "Action Plan for the Electricity Business for Achieving

a Low-Carbon Society as a whole by reducing CO2 emissions per unit to around 0.37kg-

CO2/kWh by FY 2030.

As a member of the Electricity Business Council for a Low-Carbon Society, we also aim to

achieve optimum energy mix and countermeasures against global warming from the viewpoint

of "S+3E" (Safety, Energy Security, Economy and Environmental Conservation). We are

steadily proceeding with various measures based on the "Action Plan for the Electricity

Business for Achieving a Low-Carbon Society ", and the current Medium-term Management

Policy that includes measures taking climate change into account. For example, one of the

main points of the policy is the "promotion of the renewable energy business" and concrete

efforts that include "development of hydroelectric power generation, geothermal power

generation, large wind power generation" as well as "utilization of hydrogen to promote the

expansion and diffusion of renewable energy".

[Explanation of whether your business strategy is linked to an emissions reductions target or

energy reduction target]

We will work on restarting the Onagawa Nuclear Power Station and others, with the premise of

ensuring safety, so that we can contribute to achieving the CO2 emission intensity of 0.37kg-

CO2/kWh by FY 2030 with the rest of the electric power business. We will also work towards

reducing CO2 emissions by improvement of efficiency of thermal power generation, including

the Shin-Sendai Thermal Power Station No. 3 series which boasts the world's highest thermal

efficiency, introduction of renewable energy utilizing the characteristics of the area, and

reduction of power loss in transmission and distribution.

[What have been the most substantial business decisions made during the reporting year that

have been influenced by the climate change driven aspects of the strategy]

In order to effectively use renewable energy such as wind power and solar power in the future,

we decided to expand the renewable energy business. In the future, especially focusing on

wind power generation, we will work on new development and business participation, utilizing

the know-how cultivated by our company and our corporate group about renewable energy in

general including solar, hydropower, geothermal, and biomass. We aim to develop 2 million kW

mainly in the Tohoku / Niigata area.

In addition, in order to utilize renewable energy in the long term and sustainably, it is important

to be involved in business related to the entire life cycle from development to operation /

maintenance, abolition, and replacement. We will also consider the development of operations

(O&M: Operation & Maintenance) and the power supply replacement business. In promoting

the business, the “Renewable Energy Business Promotion Council” was set up with the top

management and the “Office of Renewable Energy Business” was established in July 2019 to

strengthen the system. In addition, in November 2019, the purchase period of the country's

feed-in tariff system will end in sequence, so there is a surplus for customers with residential

solar power generation facilities that have reached the end of the feed-in period of the feed-in

tariff system. Consequently, we have decided to develop a service to purchase their electricity.

26

C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-

FB3.1e/C-MM3.1e/C-OG3.1e/C-PF3.1e/C-ST3.1e/C-TO3.1e/C-

TS3.1e

(C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-FB3.1e/C-MM3.1e/C-OG3.1e/C-

PF3.1e/C-ST3.1e/C-TO3.1e/C-TS3.1e) Disclose details of your organization’s low-

carbon transition plan. As a member of the Electricity Business for a Low-Carbon Society, we are pursuing a low

carbon transition plan in accordance with the Low Carbon Society Action Plan of the Council.

The Electricity Business Council for a Low-Carbon Society aims to achieve an emission factor

of about 0.37kg-CO2/kWh by FY 2030 based on the long-term energy supply and demand

forecast of 2030 shown by the government.

The Council formulated an Action Plan for the Electricity Business for Achieving a Low-Carbon

Society, and as part of "the target of domestic corporate activities for 2030" will utilize nuclear

power generation with the premise of ensuring safety, utilizing renewable energy, and

achieving high efficiency of thermal power generation as well as delivering services such as

energy conservation and CO2 reduction to customers in the electricity retail field. The

businesses will also introduce technologies such as smart meters as part of efforts to "enhance

alliances between entities". As part of efforts to "promote international contribution" the

businesses will work on overseas expansion of business technologies and insight. And to deal

with the "development of innovative technologies” the businesses will introduce large amounts

of renewable energy.

Specifically, we have set Initiatives for restarting the Onagawa Nuclear Power Station Unit 2

with putting safety first, replacing the Shin Sendai Thermal Power Station No. 3 series with high

efficiency thermal power generation equipment and construction of new hydropower stations

such as the Tsugaru Power Station and the Dai-ni Yabukami Power Station.

C3.1g

(C3.1g) Why does your organization not use climate-related scenario analysis to

inform your business strategy? The final report of TCFD and the guidance published by the Japanese government provided an

outline for creating a scenario at the present time. However, business operators still have to

consider detailed analysis methods and in light of the fact that some institutional investors

suggest that TCFD should have a role in creating a good benchmark, we are considering the

introduction of scenario analysis within the next two years. In April 2019, we announced our

support for TCFD. Currently, we are examining climate scenario analysis while referring to

good practices from other companies as appropriate. Since it is important to assume multiple

scenarios instead of a single scenario, as this will lead to the company's resilience for an

uncertain future, risks will be assumed based on appropriate multiple scenarios in the future

with an analysis for each scenario of impacts and opportunities on the Company and their

respective countermeasures.

27

C4. Targets and performance

C4.1

(C4.1) Did you have an emissions target that was active in the reporting year? Intensity target

C4.1b

(C4.1b) Provide details of your emissions intensity target(s) and progress made

against those target(s).

Target reference number Int 1

Scope Scope 1

% emissions in Scope 100

% reduction from baseline year 37

Metric Metric tons CO2e per megawatt hour (MWh)

Base year 2013

Start year 2015

Normalized baseline year emissions covered by target (metric tons CO2e) 0.589

Target year 2030

Is this a science-based target? No, and we do not anticipate setting one in the next 2 years

% achieved (emissions) 30

Target status Underway

Please explain

28

The Electricity Business Council for a Low-Carbon Society aims to achieve about

0.37kg-CO2/kWh, and by implementing the PDCA cycle based on the individual

company action plan, we will actively execute actions towards achieving the goals.

Around 0.37kg-CO2/kWh is consistent with the national emission factor calculated from

the energy mix indicated by the government's Long-Term Energy Supply and Demand

Outlook.

The scope of this target includes CO2 emissions from electricity purchased from other

companies for the purpose of selling to our customers, but as most of it is CO2

emissions from our own power generation, Scope 1 is selected as the target scope.

% change anticipated in absolute Scope 1+2 emissions -37

% change anticipated in absolute Scope 3 emissions 0

C4.2

(C4.2) Provide details of other key climate-related targets not already reported in

question C4.1/a/b.

Target Other, please specify (Non-fossil power supply ratio)

KPI – Metric numerator non-fossil energy sources

KPI – Metric denominator (intensity targets only) Total power generation

Base year

Start year

Target year 2030

KPI in baseline year

KPI in target year 0.44

% achieved in reporting year

29

Target Status

Please explain Non-fossil power supply ratio in the Act on Sophisticated Methods of Energy Supply

Structures 44%

Part of emissions target

Is this target part of an overarching initiative?

C4.3

(C4.3) Did you have emissions reduction initiatives that were active within the

reporting year? Note that this can include those in the planning and/or

implementation phases. Yes

C4.3a

(C4.3a) Identify the total number of projects at each stage of development, and for

those in the implementation stages, the estimated CO2e savings.

Number of

projects

Total estimated annual CO2e savings in metric tonnes

CO2e (only for rows marked *)

Under investigation 0

To be implemented* 2 0

Implementation

commenced*

1 0

Implemented* 3 140,319

Not to be implemented 0

C4.3b

(C4.3b) Provide details on the initiatives implemented in the reporting year in the table

below.

Activity type Low-carbon energy installation

Description of activity Natural Gas

Estimated annual CO2e savings (metric tonnes CO2e)

30

50,000

Scope Scope1

Voluntary/Mandatory Voluntary

Annual monetary savings (unit currency – as specified in CC0.4) 1,800,000,000

Investment required (unit currency – as specified in CC0.4) 26,195,000,000

Payback period 11-15 years

Estimated lifetime of the initiative >30 years

Comment At the Shin-Sendai Thermal Power Station No 3 series, the existing Shin-Sendai Power

Station Units 1(heavy oil) and 2(LNG, heavy oil and crude oil) were terminated and

replaced with existing high-efficiency combined cycle power generation facilities.

Commercial operation commenced at half of capacity in December 2015, and at full

output in July 2016, achieving the world's highest thermal efficiency of 60% or more. In

July 2017, we increased the rated output (980,000kW → 1046,000kW: an increase of

66,000kW) and started operation. In addition, the Sendai Thermal Power Station Unit

No. 4, which is also a high-efficiency combined cycle power generation facility (LNG),

increased its rated output in April 2017 (446,000 kW → 468,000 kW: an increase of

22,000 kW) and started operation. Since the investment amount includes sensitive

management information, we responded with an increase of 261,950 billion yen in the

recorded cost of steam power generation facilities in FY2017 (including the increased

output of Shin-Sendai Thermal Power Station Series 3 and Sendai Thermal Power

Station Unit 4). For the investment recovery period, we responded with the service life of

depreciable assets under the tax law (15 years for steam power generation facilities).

Activity type Low-carbon energy installation

Description of activity Hydro

Estimated annual CO2e savings (metric tonnes CO2e) 90,319

Scope Scope 1

31

Voluntary/Mandatory Voluntary

Annual monetary savings (unit currency – as specified in CC0.4) 1,000,000,000

Investment required (unit currency – as specified in CC0.4) 19,524,000,000

Payback period 21-25 years

Estimated lifetime of the initiative >30 years

Comment We are actively working on the establishment of hydroelectric power stations. The

Kanose Power Plant has been undergoing a large-scale renovation work since about 80

years have passed since the start of operation. In September 2017, the large-scale

renovation work was completed, and commercial operation was resumed. Specifically,

by changing the number of turbine generators from six to two and adopting a high-

efficiency vertical shaft turbine, the maximum output increased by about 10%

(49,500kW → 54,200 kW) without changing the amount of water used. Annual emission

reductions are estimated using the electricity generated at the Kanose power plant in

FY2017 and our emission factor in FY2016. The annual expense reduction was

calculated using the reduced fuel cost when substituting thermal power generation using

the steam power generation fuel cost for FY 2017, the internal combustion power

generation fuel cost, and the amount of thermal power generation in FY 2017. As the

investment amount contains sensitive information on management, we provide the

increase in recorded cost of 19.524 billion JPY of Hydroelectric power generation

equipment in FY 2017 (including investments for Kanose Power Station) as well as the

repayment period which is the service life of the depreciable assets under the tax law

(22 years for hydroelectric power generation facilities in the electric power business).

C4.3c

(C4.3c) What methods do you use to drive investment in emissions reduction

activities?

Method Comment

Compliance with regulatory

requirements/standards

Make investment decisions in light of regulations imposed on

the power industry or those expected to be introduced.

C4.5

(C4.5) Do you classify any of your existing goods and/or services as low-carbon

products or do they enable a third party to avoid GHG emissions? No

32

C-EU4.6

(C-EU4.6) Describe your organization’s efforts to reduce methane emissions from

your electricity generation activities. We are continuously working to reduce methane emissions from thermal power plants, and

there is no level of methane emissions that must be reported to the government under the

Japanese Act on Promotion of Global Warming Countermeasures.

Our activities may contribute to reduction of methane emission at the coal mining stage and oil /

gas production stage by promoting reduction of fuel consumption through high efficiency of

thermal power generation including at the Shin-Sendai Thermal Power Station No. 3 series

which boasts the world's highest thermal efficiency (with a thermal efficiency of 60% or more).

C5. Emissions methodology

C5.1

(C5.1) Provide your base year and base year emissions (Scopes 1 and 2).

Scope 1

Base year start April 1 2013

Base year end March 31 2014

Base year emissions (metric tons CO2e) 36,777,400

Comment

Scope 2 (location-based)



Base year emissions (metric tons CO2e) 0

Comment

Scope 2 (market-based)

33



Base year emissions (metric tons CO2e) 0

Comment As the company (including headquarters) uses electricity generated by the company

itself, Scope 2 emissions are 0t.

C5.2

(C5.2) Select the name of the standard, protocol, or methodology you have used to

collect activity data and calculate Scope 1 and Scope 2 emissions. Act on the Rational Use of Energy

The Act on Promotion of Global Warming Countermeasures (revised in 2005) by the Japan

Ministry of the Environment

34

C6. Emissions data

C6.1

(C6.1) What were your organization’s gross global Scope 1 emissions in metric tons

CO2e?

Row 1

Gross global Scope 1 emissions (metric tons CO2e) 32,767,500

Comment

C6.2

(C6.2) Describe your organization’s approach to reporting Scope 2 emissions.

Row 1

Scope 2, location-based We are reporting a Scope 2, location-based figure

Scope 2, market-based We are reporting a Scope 2, market-based figure

Comment

C6.3

(C6.3) What were your organization’s gross global Scope 2 emissions in metric tons

CO2e?

Row 1

Scope 2, location-based 0

Scope 2, market-based (if applicable) 0

Comment As the company (including headquarters) uses electricity generated by the company,

Scope 2 emissions are 0t.

35

C6.4

(C6.4) Are there any sources (e.g. facilities, specific GHGs, activities, geographies,

etc.) of Scope 1 and Scope 2 emissions that are within your selected reporting

boundary which are not included in your disclosure? No

C6.5

(C6.5) Account for your organization’s Scope 3 emissions, disclosing and explaining

any exclusions.

Purchased goods and services

Evaluation status Not relevant, explanation provided

Metric tonnes CO2e

Emissions calculation methodology

Percentage of emissions calculated using data obtained from suppliers or

value chain partners

Explanation It is extremely small compared with the total amount of Scope 3 emission.

Capital goods

Evaluation status Relevant, calculated

Metric tonnes CO2e 784,793

Emissions calculation methodology The electricity business’ fixed asset recorded cost increase (237,816 million JPY) x

capital goods emission factor (3.30t /million JPY)

* Source of emission factor: "Emission intensity per unit of capital goods" in "Emission

intensity unit database for calculating an organization's greenhouse gas emissions etc.

through supply chain" published by Ministry of the Environment


value chain partners 100

Explanation

Fuel-and-energy-related activities (not included in Scope 1 or 2)

36


Metric tonnes CO2e 10,448,896

Emissions calculation methodology Electricity received from other companies (20,408GWh) × substitute value (0.512 kg-

CO2/kWh) = 10,448,896t

* Source of substitute value: Electricity companies' emission factor (for calculation of

greenhouse gas emissions of specific establishment emitters) - FY2016 results



Explanation

Upstream transportation and distribution


Metric tonnes CO2e 26,872

Emissions calculation methodology CO2 emissions from domestic cargo transports submitted to the government every year

under the Act on the Rational Use of Energy.



Explanation

Waste generated in operations


Metric tonnes CO2e




Explanation It is extremely small compared with the total amount of Scope 3 emissions.

37

Business travel


Metric tonnes CO2e





Employee commuting


Metric tonnes CO2e





Upstream leased assets


Metric tonnes CO2e




Explanation Because the relationship with the main business (the electric power business) is

insignificant.

Downstream transportation and distribution

38


Metric tonnes CO2e





Processing of sold products


Metric tonnes CO2e





insignificant.

Use of sold products


Metric tonnes CO2e




Explanation Because it is included in Scope 1, and not calculated separately.

End of life treatment of sold products


Metric tonnes CO2e

39





insignificant.

Downstream leased assets


Metric tonnes CO2e





insignificant.

Franchises


Metric tonnes CO2e




Explanation Because there is no franchise.

Investments


Metric tonnes CO2e


40




Other (upstream)

Evaluation status

Metric tonnes CO2e




Explanation

Other (downstream)

Evaluation status

Metric tonnes CO2e




Explanation

C6.7

(C6.7) Are carbon dioxide emissions from biologically sequestered carbon relevant to

your organization? No

C6.10

(C6.10) Describe your gross global combined Scope 1 and 2 emissions for the

reporting year in metric tons CO2e per unit currency total revenue and provide any

additional intensity metrics that are appropriate to your business operations.

Intensity figure 0.0000175293

41

Metric numerator (Gross global combined Scope 1 and 2 emissions) 32,767,500

Metric denominator unit total revenue

Metric denominator: Unit total 1,869,300,000,000

Scope 2 figure used Market-based

% change from previous year 4.35

Direction of change Decreased

Reason for change Emission reduction activities through the introduction of low-carbon energy facilities,

such as increased output of high-efficiency combined cycle (LNG) and renewal of

hydroelectric power stations. Increase in the amount of electricity sold by other

companies through aggressive use of wholesale power exchanges and increase in

wholesale to other companies. Increase in sales due to fuel cost adjustments and other

factors.

Intensity figure 0.000498168

Metric numerator (Gross global combined Scope 1 and 2 emissions) 32,767,500

Metric denominator megawatt hour generated (MWh)

Metric denominator: Unit total 65,776,000

Scope 2 figure used Market-based


Direction of change Increased

Reason for change

42

The intensity figure has increased as CO2 emissions from thermal power generation

have increased due to factors such as an increase in the operating rate of thermal

power stations.

C7. Emissions breakdowns

C7.1

(C7.1) Does your organization have greenhouse gas emissions other than carbon

dioxide? Yes

C7.1a

(C7.1a) Break down your total gross global Scope 1 emissions by greenhouse gas

type and provide the source of each used greenhouse warming potential (GWP).

Greenhouse gas Scope 1 emissions

(metric tons of CO2e)

GWP Reference

CO2 32,700,000 IPCC Fourth Assessment Report (AR4 - 100 year)

N2O 42,200 IPCC Fourth Assessment Report (AR4 - 100 year)

SF6 25,300 IPCC Fourth Assessment Report (AR4 - 100 year)

C-EU7.1b

(C-OG7.1b) Break down your total gross global Scope 1 emissions from electric

utilities value chain activities by greenhouse gas type.

Gross Scope

1 CO2

emissions

(metric tons

CO2)

Gross Scope 1

methane

emissions

(metric tons

CH4)

Gross Scope

1 SF6

emissions

(metric tons

SF6)

Gross Scope

1 emissions

(metric tons

CO2e)

Comment

Fugitives 0 0 25,300 25,300 SF6 is the value

converted to

CO2.

Combustion

(Electric

utilities)

32,700,000 0 42,200 32,742,200 The values listed

in the SF6

column are N2O

emissions

converted to

CO2.

Combustion

(Gas utilities)

0 0 0 0

43

Combustion

(Other)

0 0 0 0

Emissions not

elsewhere

classified

0 0 0 0

C7.2

(C7.2) Break down your total gross global Scope 1 emissions by country/region.

Country/Region Scope 1 emissions (metric tons CO2e)

Japan 32,767,500

C7.3

(C7.3) Indicate which gross global Scope 1 emissions breakdowns you are able to

provide. By activity

C7.3c

(C7.3c) Break down your total gross global Scope 1 emissions by business activity.

Activity Scope 1 emissions (metric tons CO2e)

Electricity generation 32,767,500

C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-

ST7.4/C-TO7.4/C-TS7.4

(C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4) Break

down your organization’s total gross global Scope 1 emissions by sector production

activity in metric tons CO2e.

Gross Scope 1

emissions, metric tons

CO2e

Net Scope 1

emissions, metric tons

CO2e

Comment

Electric utility

generation activities

32,767,500 <Not Applicable>

C7.5

(C7.5) Break down your total gross global Scope 2 emissions by country/region.

Country/Region Scope 2,

location-

based

(metric tons

CO2e)

Scope 2,

market-

based

(metric tons

CO2e)

Purchased and

consumed

electricity, heat,

steam or cooling

(MWh)

Purchased and consumed

low-carbon electricity, heat,

steam or cooling accounted

in market-based approach

(MWh)

44

Japan 0 0 0 0

C7.6

(C7.6) Indicate which gross global Scope 2 emissions breakdowns you are able to

provide. By facility

C7.6b

(C7.6b) Break down your total gross global Scope 2 emissions by business facility.

Facility Scope 2 location-based

emissions (metric tons CO2e)

Scope 2, market-based

emissions (metric tons CO2e)

Headquarters mainly engaged

in administration work

0 0

Others 0 0

C7.9

(C7.9) How do your gross global emissions (Scope 1 and 2 combined) for the

reporting year compare to those of the previous reporting year? Increased

C7.9a

(C7.9a) Identify the reasons for any change in your gross global emissions (Scope 1

and 2 combined) and for each of them specify how your emissions compare to the

previous year.

Change in

emissions

(metric tons

CO2e)

Direction of

change

Emissions

value

(percentage)

Please explain calculation

Change in

renewable

energy

consumption

90,319 Decreased 0.28 Reduction of annual emissions due to

operation of the Kanose Power Station

÷ previous year's Scope 1 + 2 (market

base) x 100

= 90,319t ÷ 31,861,100 t × 100

=Approx. 0.28%

CO2 emissions decreased due to the

operation of the Kanose Hydropower

Station

Other

emissions

45

reduction

activities

Divestment

Acquisitions

Mergers

Change in

output

906,400 Increased 2.8 (Scope 1 + 2 (market base) of the

current fiscal year - Scope 1 + 2 (market

base) of the previous year) ÷ (Scope 1 +

2 (market base) of the previous fiscal

year)) x 100 = (32,767,500t-

31,861,100t) ÷ 31,861,100t × 100 =

Approx. 2.8%

CO2 emissions increased due to an

increase in in-house power generation.

Change in

methodology

Change in

boundary

Change in

physical

operating

conditions

Unidentified

Other

C7.9b

(C7.9b) Are your emissions performance calculations in C7.9 and C7.9a based on a

location-based Scope 2 emissions figure or a market-based Scope 2 emissions

figure? Market-based

C8. Energy

C8.1

(C8.1) What percentage of your total operational spend in the reporting year was on

energy? More than 15% but less than or equal to 20%

46

C8.2

(C8.2) Select which energy-related activities your organization has undertaken.

Indicate whether your organization

undertakes this energy-related activity

Consumption of fuel (excluding feedstocks) Yes

Consumption of purchased or acquired electricity No

Consumption of purchased or acquired heat No

Consumption of purchased or acquired steam No

Consumption of purchased or acquired cooling No

Generation of electricity, heat, steam, or cooling Yes

C8.2a

(C8.2a) Report your organization’s energy consumption totals (excluding feedstocks)

in MWh.

Heating value MWh from

renewable

sources

MWh from

non-renewable

sources

Total MWh

Consumption of fuel (excluding

feedstock)

HHV (higher

heating value)

0 131,245,556 131,245,556

Consumption of purchased or

acquired electricity

<Not

Applicable>

<Not

Applicable>

<Not

Applicable>

<Not

Applicable>


acquired heat

<Not

Applicable>

<Not

Applicable>

<Not

Applicable>

<Not

Applicable>


acquired steam

<Not

Applicable>

<Not

Applicable>

<Not

Applicable>

<Not

Applicable>


acquired cooling

<Not

Applicable>

<Not

Applicable>

<Not

Applicable>

<Not

Applicable>

Consumption of self-generated

non-fuel renewable energy

<Not

Applicable>

0 <Not

Applicable>

0

Total energy consumption <Not

Applicable>

0 131,245,556 131,245,556

C8.2b

(C8.2b) Select the applications of your organization’s consumption of fuel.

Indicate whether your organization

undertakes this fuel application

Consumption of fuel for the generation of electricity Yes

Yes

47

Consumption of fuel for the generation of steam No

Consumption of fuel for the generation of cooling No

Consumption of fuel for co-generation or tri-generation No

C8.2c

(C8.2c) State how much fuel in MWh your organization has consumed (excluding

feedstocks) by fuel type.

Fuels (excluding feedstocks) Coal

Heating value HHV (higher heating value)

Total fuel MWh consumed by the organization 58,110,556

MWh fuel consumed for the self-generation of electricity 58,110,556

MWh fuel consumed for self-generation of heat 0

MWh fuel consumed for self-generation of steam <Not Applicable>

MWh fuel consumed for self-generation of cooling <Not Applicable>

MWh fuel consumed for self- cogeneration or self-trigeneration <Not Applicable>

Fuels (excluding feedstocks) Crude Oil Heavy





48




Fuels (excluding feedstocks) Crude Oil








Fuels (excluding feedstocks) Natural Gas





49




Fuels (excluding feedstocks) Liquefied Natural Gas (LNG)








C8.2d

(C8.2d) List the average emission factors of the fuels reported in C8.2c.

Coal

Emission factor 0.0247

Unit metric tons CO2 per GJ

Emission factor source Greenhouse gas calculation and reporting manual on calculation, reporting and

publication of greenhouse gas emissions based on the Act on Promotion of Global

Warming Countermeasures

50

Comment

Crude Oil






Comment

Crude Oil Heavy






Comment

Liquefied Natural Gas (LNG)






Comment

Natural Gas

51






Comment

C-8.2e

(C8.2e) Provide details on the electricity, heat, steam, and cooling your organization

has generated and consumed in the reporting year.

Total Gross

generation (MWh)

Generation that is

consumed by the

organization

Gross generation

from renewable

sources (MWh)

Generation from

renewable sources

that is consumed

by the organization

(MWh)

Electricity 65,776,000 2,838,000 9,254,000 0

Heat 0 0 0 0

Steam 0 0 0 0

Cooling 0 0 0 0

C-EU8.2e

(C-EU8.2e) For your electric utility activities, provide a breakdown of your total power

plant capacity, generation, and related emissions during the reporting year by source.

Coal – hard

Nameplate capacity (MW) 0

Gross electricity generation (GWh) 0

Net electricity generation (GWh) 0

Absolute scope 1 emissions (metric tons CO2e) 0

52

Scope 1 emissions intensity (metric tons CO2e per GWh) 0

Comment

Lignite

Nameplate capacity (MW) 3,200

Gross electricity generation (GWh) 27,894

Net electricity generation (GWh) 26,778

Absolute scope 1 emissions (metric tons CO2e) 18,946,366

Scope 1 emissions intensity (metric tons CO2e per GWh) 679.23

Comment Coal

Oil






Comment Crude Oil Heavy, Crude Oil

Gas



53




Comment Natural Gas, Liquefied Natural Gas (LNG);

Biomass






Comment

Waste (non-biomass)






Comment

Nuclear

54






Comment

Geothermal

Nameplate capacity (MW) 188.8





Comment

Hydroelectric






55

Comment

Wind






Comment

Solar

Nameplate capacity (MW) 4.8





Comment

Other renewable




56



Comment

Other non-renewable






Comment

Total






Comment

57

C-EU8.4

(C-EU8.4) Does your electric utility organization have a global transmission and

distribution business? Yes

C-EU8.4a

(C-EU8.4a) Disclose the following information about your transmission and

distribution business.

Country/region Japan

Voltage level Transmission (high voltage)

Annual load (GWh) 82,321

Scope 2 emissions (basis) Market-based

Scope 2 emissions (metric tons CO2e) 0

Annual energy losses (% of annual load) 4.8

Length of network (km) 15,281

Number of connections 58,307

Area covered (km2) 8,549

Comment We disclose Annual load and Annual energy losses as Transmission and Distribution.

Country/region Japan

Voltage level

58

Distribution (low voltage)

Annual load (GWh) 82,321

Scope 2 emissions (basis) Market-based

Scope 2 emissions (metric tons CO2e) 0

Annual energy losses (% of annual load) 4.8

Length of network (km) 147,582

Number of connections 3,116,413

Area covered (km2) 20

Comment We disclose Annual load and Annual energy losses as Transmission and Distribution.

C9. Additional metrics

C9.1

(C9.1) Provide any additional climate-related metrics relevant to your business.

Description Other, please specify (Thermal efficiency of thermal power plant)

Metric value 46.2

Metric numerator Gross thermal efficiency (Lower Heating Value (LHV) standard)

Metric denominator (intensity metric only)


Direction of change

59

Increased

Please explain While improving the awareness of plant performance management by visualizing the

thermal efficiency of each thermal power plant, we strive to maintain and improve

thermal efficiency through daily management and performance tests after periodic

inspections. The power generation end thermal efficiency (46.2%: low calorific value

standard) of FY2016 (46.3%) was maintained. In FY 2016 (46.3%), the Shin-Sendai

Thermal Power Station Series 3 (LNG / output 980,000 kW (at the time)), which

achieved the world's highest level of thermal efficiency of 60% or higher (low heating

value standard) is in full operation, resulting in an increase from FY2015 (45.6%).

C-EU9.5a

(C-EU9.5a) Break down, by source, your total planned CAPEX in your current CAPEX

plan for power generation.

Primary

power

generation

source

CAPEX planned

for power

generation from

this source

Percentage of

total CAPEX

planned for power

generation

End year of

CAPEX plan

Comment

Gas 2023 LNG: Joetsu

Thermal Power Station Unit 1

(Output: 572,000 kW, planned

commencement of operation:

June 2023)

Lignite 2020 Coal: Noshiro Thermal Power

Station Unit 3 (Output: 600,000

kW, planned commencement

of operation: March 2020)

C-EU9.5b

(C-EU9.5b) Break down your total planned CAPEX in your current CAPEX plan for

products and services (e.g. smart grids, digitalization, etc.).

Products

and

services

Description of product/service CAPEX

planned

for

product/

service

Percentage

of total

CAPEX

planned

products

and

services

End of

year

CAPEX

plan

Other,

please

specify

We plan to introduce a new distribution transformer.

In order to reduce the environmental burden such as

reduction of CO2 emissions, we developed with our

transformer supplier, Kitashiba Electric Co., Ltd., an

2021

60

(introduction

of a new

distribution

transformer)

environmentally friendly transformer that uses

rapeseed oil instead of the conventional mineral oil

for insulating which is the first ever in Japan. Both

companies cooperated in order to solve problems

such as cost reduction, measures against aging years

and environmental load reduction to newly develop a

practically usable environmentally friendly

transformer. This transformer has an extended life

expectancy of 60 years, twice as long as the

conventional product, and has reduced power loss by

about 15%. Also, when discarding the transformer,

the insulating oil is extracted and incinerated, but as

rapeseed oil absorbs CO2 during growth the CO2

emitted during incineration is offset to become carbon

neutral.

C-CO9.6/C-EU9.6/C-OG9.6

(C-CO9.6/C-EU9.6/C-OG9.6) Disclose your investments in low-carbon research and

development (R&D), equipment, products, and services.

Investment start date April 1 2017

Investment end date March 31 2018

Investment area R&D

Technology area Renewable energy

Investment maturity Pilot demonstration

Investment figure 6,338,000,000

Low-carbon investment percentage

Please explain To further expand the introduction of renewable energy, we started operation of the

"hydrogen production system" to conduct research on hydrogen production in March

2017 and carried out research using this system. We installed new equipment such as

solar power generation equipment and hydrogen production equipment in the building of

the Research & Development Center where we manufactured and stored hydrogen

using electricity generated by photovoltaic power generation. Electricity for the Center

was generated from the hydrogen developed in this research. Since the investment

61

amount includes sensitive management information, we have stated the research

expense (6.338 billion JPY) of the whole Company in FY 2017.

Investment start date April 1 2018

Investment end date March 31 2019

Investment area R&D

Technology area Digital technology

Investment maturity Pilot demonstration

Investment figure 6,338,000,000

Low-carbon investment percentage

Please explain We are implementing the “Virtual Power Plant (VPP) Demonstration Project” as an

initiative that utilizes new information technologies such as IoT and AI. VPP refers to the

use of new information technology such as IoT for remote energy resources such as

power generation facilities, storage batteries, and electric vehicles owned by local

governments, companies, and general household customers. By controlling and

consolidating it, it functions as if it were a single power plant. In this project, we will

collect distributed power sources such as renewable energy such as solar power as a

VPP energy resource and verify it for use as a supply-demand balance adjustment

function. In addition, we will work on the verification of technology (V2G: Vehicle to Grid)

for charging and discharging electric vehicle storage batteries by connecting them to the

power system by making effective use of solar power generation facilities and storage

batteries installed in public facilities. In addition, we will work on the development of

services that lead to energy and cost savings by making effective use of customer

facilities and equipment. Since the amount of investment includes sensitive

management information, the total amount of research expenses for the entire company

in fiscal 2017 (¥ 6.338 billion) is shown.

62

C10. Verification

C10.1

(C10.1) Indicate the verification/assurance status that applies to your reported

emissions.

Verification/assurance status

Scope 1 Third-party verification or assurance process in place

Scope 2

(location-based or market-based)

Third-party verification or assurance process in place

Scope 3 Third-party verification or assurance process in place

C10.1a

(C10.1a) Provide further details of the verification/assurance undertaken for your

Scope 1 and/or Scope 2 emissions and attach the relevant statements.

Scope Scope 1

Verification or assurance cycle in place Annual process

Status in the current reporting year Complete

Type of verification or assurance Limited assurance

Attach the statement

190730_c10.pdf

Page/section reference See page 1 for Independent Assurance Report, see page 2 for Letters from independent third

parties for CDP responses, see page 3 for scope 1 emissions.

Relevant standard ISAE3000

Proportion of reported emissions verified (%) 100

Scope Scope 2 market-based

63



Type of verification or assurance Limited assurance


190730_c10.pdf




Proportion of reported emissions verified (%) 100

C10.1b

(C10.1b) Provide further details of the verification/assurance undertaken for your

Scope 3 emissions and attach the relevant statements.

Scope Scope 3- at least one applicable category




190730_c10.pdf




64

C10.2

(C10.2) Do you verify any climate-related information reported in your CDP disclosure

other than the emissions figures reported in C6.1, C6.3, and C6.5? No, but we are actively considering verifying within the next two years

C11. Carbon pricing

C11.1

(C11.1) Are any of your operations or activities regulated by a carbon pricing system

(i.e. ETS, Cap & Trade or Carbon Tax)? Yes

C11.1a

(C11.1a) Select the carbon pricing regulation(s) which impacts your operations. Japan carbon tax

C11.1c

(C11.1c) Complete the following table for each of the tax systems in which you

participate.

Japan carbon tax

Period start date April 1 2017

Period end date March 31 2018

% of emissions covered by tax 100

Total cost of tax paid 9,200,000,000

Comment 9.2 billion JPY of total tax paid is calculated by multiplying the fuel consumption for FY

2017 by the tax rate of "tax for measures against global warming".

C11.1d

(C11.1d) What is your strategy for complying with the systems in which you

participate or anticipate participating?

65

Because it is a tax corresponding to the amount of fossil fuel procured, we are working on restarting

nuclear power stations with putting safety first and aim to further expand the introduction of renewable

energy. Specifically, with the mainstay of wind power generation in the future, new developments and

businesses that utilize the know-how cultivated by the Company and our corporate group have been

developed for renewable energy in general, including solar, hydropower, geothermal, and biomass.

We will work on participation and aim to develop 2 million kW mainly in the Tohoku and Niigata areas.

In addition, in order to utilize renewable energy in the long term and sustainably, it is important to be

involved in business related to the entire life cycle from development to operation / maintenance,

abolition, and replacement. We will also investigate the development of operations (O & M: Operation

& Maintenance) and the power supply replacement business. Furthermore, Noshiro Thermal Power

No. 3, which introduces the super supercritical pressure system (USC), and Joetsu Thermal Power

No. 1, which is expected to have a thermal efficiency of 63% or more, which is our highest thermal

efficiency, will be introduced to further increase the efficiency of thermal power generation. We aim to

reduce the amount of fuel used and further improve efficiency.

C11.2

(C11.2) Has your organization originated or purchased any project-based carbon

credits within the reporting period? No

C11.3

(C11.3) Does your organization use an internal price on carbon? Yes

C11.3a

(C11.3a) Provide details of how your organization uses an internal price on carbon.

Objective for implementing an internal carbon price Drive low-carbon investment

GHG Scope Scope 1

Application Thermal power station. It will be used to assess risks and opportunities associated with

investment in power plants, such as reducing CO2 emission factors, increasing non-

fossil ratios, and regulatory costs related to climate change issues.

Actual price(s) used (Currency /metric ton) 2,600

Variance of price(s) used We refer to the prices of non-fossil certificates that can be used to report the CO2

emission factors of electric power companies under the Act on Promotion of Global

66

Warming Countermeasures. Specifically, the national average coefficient is assumed to

be 0.500kg-CO2 / kWh, and converted from the lowest bid price of 1.3 yen / kWh for FIT

non-fossil certificates. This pricing gradually changes over time.

Type of internal carbon price Internal fee

Impact & implication As an assessment of the risks and opportunities associated with investment in a power

plant, we will conduct a price assessment based on the carbon dioxide emission

coefficient of the power plant and the above internal carbon price.

C12. Engagement

C12.1

(C12.1) Do you engage with your value chain on climate-related issues? Yes, our suppliers

Yes, other partners in the value chain

C12.1a

(C12.1a) Provide details of your climate-related supplier engagement strategy.

Type of engagement Innovation & collaboration (changing markets)

Details of engagement Run a campaign to encourage innovation to reduce climate impacts on products and

services

% of suppliers by number 1

% total procurement spend (direct and indirect) 1

% Scope 3 emissions as reported in C6.5 0

Rationale for the coverage of your engagement Reducing CO2 emissions through efforts such as reducing power loss and introducing

environmentally conscious transformers is an issue, and collaboration with transformer

suppliers is important.

Impact of engagement, including measures of success

67

In order to reduce the environmental burden such as reduction of CO2 emissions, we

developed with our transformer supplier, Kitashiba Electric Co., Ltd., an environmentally

friendly transformer that uses rapeseed oil instead of the conventional mineral oil for

insulating which is the first ever in Japan. Both companies cooperated in order to solve

problems such as cost reduction, measures against aging years and environmental load

reduction to newly develop a practically usable environmentally friendly transformer.

This transformer has an extended life expectancy of 60 years, twice as long as the

conventional product, and has reduced power loss by about 15%. Also, when discarding

the transformer, the insulating oil is extracted and incinerated, but as rapeseed oil

absorbs CO2 during growth the CO2 emitted during incineration is offset to become

carbon neutral. The number of transformers installed and the power loss rate (%) are

used as scales and are continuously monitored. As of the end of fiscal 2017 we

introduced 64 units, and we anticipate an annual reduction of 1,167 tons of CO2

emissions.

Comment

C12.1c

(C12.1c) Give details of your climate-related engagement strategy with other partners

in the value chain. We regard environmental conservation as one of the important management issues and

formulate the Mid-term Environmental Action Plan to promote initiatives such as reducing CO2

emissions. As part of such efforts, we partnered with Toyota Motor Corporation and launched a

new service for customers who purchase plug-in hybrid vehicles (PHV) that are excellent in

environmental performance. From March 2017, we started the “PHV Yorisou e-Drive Project”

where we will provide PHV customers with “Yorisou e-Points", an electronic money / common

points, from our Company according to metrics such as the EV mode mileage, contributing to

the improvement of the customer's energy use efficiency.

The Project offers a variety of services through our membership-based web service "Yorisou e-

Net" which is scheduled to operate for 3 years from March 2017.

PHV is a hybrid car that can be charged from an external power source and has excellent

environmental performance that combines the merit of an electric vehicle that does not emit

CO2 or exhaust gas at the time of driving and the merit of a hybrid car with high fuel efficiency

performance. In the Act on Promotion of Global Warming Countermeasures formulated by the

government, the spread of next-generation vehicles such as PHV is mentioned as a measure to

reduce the emissions from the transportation sector, which accounts for approximately 17% of

the total CO2 emissions in Japan. We plan to introduce a total of around 100 PHVs as

commercial vehicles over the next 10 years and reduce CO2 emissions by about 60 tons.

The Project is a new initiative to protect the rich nature of the region and pass on the global

environment in a more desirable form to future generations. We will continue to develop

initiatives according to customer's needs while reducing environmental impact.

68

C12.3

(C12.3) Do you engage in activities that could either directly or indirectly influence

public policy on climate-related issues through any of the following? Trade associations

C12.3b

(C12.3b) (C12.3b) Are you on the board of any trade associations or do you provide

funding beyond membership? Yes

C12.3c

(C12.3c) Enter the details of those trade associations that are likely to take a position

on climate change legislation.

Trade association The Electricity Business Council for a Low-Carbon Society

Is your position on climate change consistent with theirs? Consistent

Please explain the trade association’s position In order to steadily promote initiatives aimed at attaining the goals set out in the Action

Plan for the Electricity Business for Achieving a Low-Carbon Society, we promote and

support efforts of member companies and promote the PDCA cycle.

How have you, or are you attempting to, influence the position? The General Manager of the Environment Division participates in the Board of Directors

of the Council as a Director and strives to reflect opinions on the operation of the council

for achieving the goals. In addition, when reporting to the Council our Company

implements a PDCA cycle for our individual company action plan concerning the Action

Plan for the Electricity Business for Achieving a Low-Carbon Society and report

examples that can be shared by other member companies.

C12.3f

(C12.3f) What processes do you have in place to ensure that all of your direct and

indirect activities that influence policy are consistent with your overall climate change

strategy? Regarding the details of the initiatives listed in the Action Plan for the Electricity Business for

Achieving a Low-Carbon Society of the Electricity Business Council for a Low-Carbon Society, an

industry organization, we implement a PDCA cycle of our Mid-term Environmental Action Plan. The

Environmental Management Committee deliberates on policies, plans, individual measures, and

performance evaluations related to the Mid-Term Environmental Action Plan across sectors and

69

proposes and reports it to the Global Environment Issue Countermeasure Council chaired by the

president.

C12.4

(C12.4) Have you published information about your organization’s response to climate

change and GHG emissions performance for this reporting year in places other than

in your CDP response? If so, please attach the publication(s).

Publication In mainstream reports

Status Complete

Attach the document

h29_ho.pdf

Content elements

Governance (p.45(ヌ), 48(3), 42, 47)

Strategy, opportunities (p.10(力点 2))

Risks & opportunities (p.12(4), 13(6))

Opportunities (p. 14(renewable energy expansion), p.20(R&D for renewable energy))

Publication In voluntary communications

Status Complete

Attach the document EnvironmentalActionReport.pdf

Content elements Governance (p.5)

Emissions figures Emission targets (p.7-8)

Other metrics (p.7-8, 53-54)

70

C14. Signoff

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Documents

C0. Introduction5 Medium-term 1 4 Fiscal year 2017 - 2020 Long-term 4 14 Fiscal year 2020 - 2030 C2.2 (C2.2) Select the option that best describes how your organization's processes